Building and renovation works are crucial to a club’s growth and are often large-scale works requiring the club to close affected departments or the entire club for a period of time.
Renovations can impact employees as it causes disruption to their employment. This article explores consultation and options for employees for forced closures due to renovations.
Consultation is important during major workplace change. Major renovations plans may require consultation with employees. Clubs should be aware of the requirement under the Registered and Licensed Clubs Award 2020 (the Award) to consult with employees when a definite decision has been made to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees. Significant effects includes major changes in the composition, operation or size of the employer’s workforce, alteration of hours of work and the need for employees to be transferred to other work or locations.
Employers who take a consultative and cooperative approach still have the right to make the final decision on how to manage their business. Employees who have the opportunity to be a part of the process are more likely to accept change and are less likely to feel anxious or fearful. Being consulted about important decisions in the workplace can improve an employee’s engagement with their work.
According to section 25.4 of the Award, “an employer may require an employee to take annual leave as part of a close-down of its operations, by giving at least 4 weeks’ notice.”
This means that if a club must close-down for potential renovation work, notice must be given to employees at least four weeks before the close-down is scheduled to occur. As best practice, we suggest notifying employees as soon as possible of the date and potential length of the closure.
Renovation closure can be treated similarly to a Christmas/New Year’s closure, whereby notice is given to employees of the closure when the club knows of the closure period dates.
There are a couple of scenarios which could arise for an employee and the closure period:
1. the employee has sufficient annual leave to cover the closure period; or
2. the employee has sufficient annual leave to cover the closure period but does not want to use it; or
3. the employee has annual leave to cover some of the closure period, but not all of it; or
4. the employee has no annual leave.
Regardless of the scenarios, ultimately the decision will come down to a consultation with each employee about their situation and how they wish to proceed for the closure period.
If an employee does not want to take annual leave and would rather proceed on unpaid annual leave for the duration of the closure, that is an option the club and employee can come to an agreement on.
We do not recommend clubs try and force employees to take annual leave, but instead suggest they communicate with their employees regarding their preference.
These situations of taking paid annual leave only apply to part-time and full-time workers because they accumulate paid leave entitlements.
Casual employees are employed on the basis that there is no firm advance commitment to ongoing work with an agreed pattern of work and are paid the casual loading without being entitled to paid annual leave and sick leave entitlements. This means that the employer is not obligated to pay casual employees for any time the business is closed and therefore not scheduled to work, just like the standard Christmas / New Year’s closure period.
Directing an employee to take annual leave
There may be a situation whereby an employee has more than enough annual leave to cover the closure period but wants to take unpaid annual leave for the period. If an employee has excessive annual leave accrual, a club can direct that employee to take annual leave for the closure period.
According to section 25.5 of the Award, excessive leave accrual occurs, “if the employee has accrued more than 8 weeks’ paid annual leave (or 10 weeks’ paid annual leave for a shift worker).”
If an employee does have what is considered “excessive leave”, the club can consult with the employee to try and genuinely reach an agreement on how to reduce the excessive leave accrual.
In the event where the club has tried to genuinely reach an agreement but could not come to an agreement with the employee, the club can direct the employee to take annual leave if the following is adhered to:
- the direction to take annual leave would not result in the employee being left with less than six weeks of accrued annual leave; and
- is for a period of at least one week; and
- does not require the employee to take a period of paid annual leave beginning less than eight weeks, or more than 12 months, after the direction is given; and
- is not inconsistent with any leave arrangement previously agreed with by the club and employee.
If the above requirements are followed, it is possible to direct an employee to take the annual leave during a club renovation closure period. However, we do recommend it is best to consult with the employee and see what they would prefer to do for the closure period instead of directing them to take annual leave.
If a club is scheduled to have large scale renovations that will require its closure, it is in the clubs’ best interest to notify employees as soon as possible. Clubs should consult with employees regarding the planned works and their options, in terms of taking paid and/or unpaid leave for the period of closure. Casual employees will not need to be paid for the period of closure. It is possible to direct an employee to take annual leave during the period of closure if the above requirements are met. However, we do not suggest for clubs to take this direct route unless necessary.
Consultation is important during major workplace change. Consultation is most effective when it’s carefully considered and planned. Best practice employers create a consultation strategy whenever they need to consult with staff about significant workplace change. Every workplace can enjoy the benefits of taking a best practice approach to consultation and cooperation.